The relationship between the costs of schooling and the size of school districts is discussed. The first section of this paper provides a critical survey of what economists have written about economies of scale and questions whether bigger is really cheaper or more efficient, as is generally found in commercial endeavors. The second section examines empirical studies by psychologists attempting to connect size with other factors (such as buildings, teaching staff, and organization, all of which are needed regardless of the school size) and trying to discover the optimal size for schools by using input (expenditures) and output (schooling) measures. The final section discusses perceptions on whether students learn better in larger or smaller schools and considers what effects school size has on: participation levels in extra-curricular activities, and the effect of participation on learning; achievement (which is not just a function of class size); attitudes (such as how students view their school and whether they will continue with higher education); and the lasting effects of school size on participation in adult life and social activity. Also included are a summary and suggestions on how states might put to use knowledge about economies of scale in schooling. (JMM)